design patents

Federal Circuit Decision Highlights Power of Design Patents

Design patents protect new ornamental designs for “articles of manufacture.” 

A recent Federal Circuit decision Auto Body Parts v. Ford Global Techs. (Fed. Cir. 2019), rejected a limitation on design patents, and highlights how design patents can be a powerful tool to secure demand in the after-market for parts and components.

The case involved design patents owned by Ford for certain components of its cars – a vehicle hood and a head lamp.  Auto Body Parts wanted to manufacture replacement parts for Ford Cars with the same designs.

Auto Body Parts argued that the design patents were “functional” and hence invalid, because consumers want to buy replacement parts to match their cars.  While arguably that would be a valid argument under trade dress law, the Federal Circuit rejected it under design patent law.  So, Ford’s component design patents were valid.

This decision highlights what can be a powerful strategy for manufacturers of products that have components that may need replacements. 

A design patent on components of a whole product (e.g., the headlamp of a car) can be leveraged to cover sales of replacement components.

Apple v. Samsung Verdict Affirms Importance of Design Patents but Leaves the Law of Damages Murky

The second Apple v. Samsung damages trial ended in a remarkable result:  $533 Million verdict for infringement of Apple’s design patents, but only $5.3 Million for infringement of Apple’s utility patents.  The big (and obvious) takeaway:  design patents are no longer the weak sister of the IP world.  Long considered obscure and of marginal importance, the verdict shows that they can be a powerful and invaluable business tool.

Yet the verdict has other lessons for those involved in IP.  The original verdict against Samsung was for $399 Million.  Samsung appealed that all the way up to the Supreme Court – and was victorious there – only to return a second time to trial and be hit with a  verdict a third higher!  Samsung may have had good reason to appeal anyway, but the result highlights the need for caution and strategic thinking – Samsung may well now regret appealing and winning.

The verdict leaves the law of design patent damages murky.  In contrast to utility patents, for design patents the Patent Act allows the plaintiff to recover the infringing defendant’s profits gained from sale of any “article of manufacture” on which the design is used.  35 U.S.C. 289.    What if the design patent covers only a component of a total item that was sold?  The Supreme Court sided with Samsung and held that the profits might only be for a component portion.  But it failed to provide any standards as to how to determine what the “article of manufacture” is in any particular case, leaving it to the lower courts to work out.  The jury apparently decided that Samsung was on the hook for the entire profits.

Determining the “profits” to be awarded in a design patent case remains unpredictable, especially since in some cases it will be left up to the jury to determine how much of the item’s profits are awardable.  This tilts the playing field in any settlement negotiation in favor of design patent owners and away from accused infringers.

Missed Opportunities to Clarify Analyses for Design Patents

In a pair of recent decisions, issued two weeks apart, the Court of Appeals for the Federal Circuit (CAFC) delved further into the thicket of design patent issues in attempting to clarify how one is to determine whether a design patent has been infringed.  One might think that determining whether a design patent has been infringed should be a relatively easy endeavor.  Yet, the CAFC’s two most recent forays into design patent jurisprudence demonstrate, again, that litigants and the courts continue to struggle with this issue.

Distinct Points-of-Novelty Test for Design Patents Ends

Four years ago we wrote about the rising importance of design patents to the fashion and luxury goods communities and the increasing prevalence of design patents as the subject of litigation.   At that time, in order to prevail on a claim of design patent infringement, a plaintiff was required to satisfy two tests: (1) the ordinary observer test, and (2) the points of novelty test.  For over two decades patent holders and accused infringers have complained that the points of novelty test was unworkable. 

Responding to the complaints, the Court of Appeals for the Federal Circuit (CAFC) recently abolished that test and ushered in a new era of design patent law.  Egyptian Goddess, Inc. v. Swisa, 543 F.3d 665 (Fed. Cir. 2008).

Design Patents Take Center Stage in the Federal Circuit

Design patents constitute a relatively small part of most patent lawyers’ practices; however, they are among the most valuable forms of intellectual property protection that many clients can obtain.  Particularly in the fashion, jewelry, and furniture industry, design patents offer a very cost-effective means to protect against look-alikes, whether the result of independent creation or copying.